Chapter Eight
Implementing Business Strategy

The difference between perseverance and obstinacy is that one comes from a strong will, and the other from a strong won’t.
Henry Ward Beecher (1813-1887), social reformer.

Just do it!
Nike, 1988.

Context

In their struggle for superiority or survival firms constantly strive to seek better ways of doing business alongside keeping a sharp lookout for lucrative opportunities they can tap into and exploit ahead of rivals. The most exciting (and bestselling) books on strategy have tended to focus on this latter element, competitive edge, in many cases drawing on military metaphors to map out the nature of the strategic game. However, organisational inertias provide a significant constraint on rational, strategic decision making.

Regardless of whether firms can implement rationally developed strategies, they must still strive to maximise the efficiency of their operations, i.e. pursue Operational Excellence. The danger with this lies in an excessive focus on internal solutions to complex external phenomena. In light of these developments, the key strategic issue is to develop a sharp focus on organisational capabilities, existing or required.

Furthermore, empirical evidence demonstrates that strategic thinking, strategic choice and strategic outcomes coexist and are readily observable at any point in time. Successful management of this complex process delivers the ultimate strategic asset: the ability to handle the twin demands of continuity and change through effective organisational design.

Integrating these themes suggests an agenda we describe as ‘balanced organisational solutions’, the combination of creative articulation of global strategic management direction and effective employment of appropriate frameworks, processes and tools. The concept of balanced solutions fundamentally addresses the challenge of securing equilibrium in the relationship between a company and its business environment and it includes joint ventures and strategic alliances and a range of ‘network solutions’ wherein a company can compensate for capability shortfalls by engaging in relationships with other companies or by acquiring and successfully integrating them.

In this chapter and, indeed, throughout the book, we do not shy away from saying what firms should do to survive in competitive and discontinuous business environments. Instead, we draw attention to the organisational complexities, limitations and inertias which prevent them from seeking, let alone attaining, optimal solutions. There is a growing awareness that if a strategy cannot be ‘marketed’ internally it will have little chance of success in the external marketplace. The concept of ‘internal marketing’ has emerged to address this issue, a ‘way of working’ which contributes towards the creation of a customer-focused organisation.

A key role of internal marketing is to ensure that all employees, and especially those who have regular direct contact with customers, believe passionately in the firm’s value propositions and that they are motivated to promote a favourable image of the company. Achieving high levels of customer satisfaction, in turn, requires considerable effort and it must be driven and underpinned by top management commitment to the customer-centric ideal and delivered through inspired leadership.

Indicative Content

    • Identifying key macro organisational capabilities assessment, including:
      1. Performance versus objectives:
        #  Volume, revenue, market share, costs, cash flows, ROI, margins, customer satisfaction etc.
      2. Strategic capabilities:
        #  Technologies, distinctive capabilities, differential advantages, innovation competencies.
        #  Generic strategies, proprietorial assets & IP, balanced product-market portfolios etc.
      3. Value proposition effectiveness and efficiency:
        #  Products, prices, promotion, distribution, customer service etc.
      4. Market-focused organisation:
        #  Marketing orientation and customer focus.
        #  Cross-functional integration.
        #  Adequate budgets.
        #  Information, planning and control systems.
        #  R&D, production and distribution processes.
        #  Management development, employee competencies and training programmes.
    • Identifying key micro organisational capabilities assessment, including (aligns with Chapters Four and Five):
      1. Customer-based strategic marketing assets:
        #  Superior image.
        #  Market leadership.
        #  Superior products.
        #  Superior service.
        #  Superior price/value.
        #  Satisfied customers.
        #  Tied-in customers.
      2. Channel-based strategic marketing assets:
        #  Widest coverage.
        #  Focused coverage.
        #  Superior intermediaries.
        #  Vertical integration.
        #  Superior channel partner relationships.
      3. Company-based strategic marketing assets:
        #  Customer-focused organisational culture.
        #  Managerial know-how.
        #  Employee know-how.
        #  Advanced technology.
        #  Flexible operations.
        #  Operational excellence.
        #  Deep pockets.
        #  Planning and systems.
    • Determining which factors to include, which to exclude and which to add for a specific business unit.
    • Determining whether each factor is a strength, weakness, neutral or distinctive versus identified rivals.
    • Determining key organisational improvement actions.
    • Squaring the circle: combining the business environment audit (cross-reference Chapter One) and the implementation audit (aligns with Appendix One, Building a Comprehensive Strategic Audit).

Learning Outcomes

After studying this chapter, readers will:

    • Understand the principles of the ‘inside-out’ business strategy perspective.
    • Have the competencies to develop a comprehensive organisational implementation audit.
    • Have the capability to determine organisational design improvement priorities.
    • Have the confidence to propose internal marketing plans.
    • Apply the principles of organisational analysis using proven practical frameworks, methodologies, processes and tools.

 


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All content © Colin Edward Egan, 2021